Economic Logic, Too

About Me

I discuss recent research in Economics and various events from an economic perspective, as the name of the blog indicates. I plan on adding posts approximately every workday, with some exceptions, for example when I travel.

Friday, December 28, 2012

Nothing beats a well-written abstract. You want in particular to use the right terminology, state clearly what you want to do and given a few good hints about your conclusions. A confusing abstract is a real put-off, but they do happen. They usually signal a really bad paper, and the chances that there is interesting content behind the veil of a obfuscating presentation is slim. Take this one:

There is no such thing as a real economy. The task, therefore, is to consistently reconstruct the fluctuations of employment and output from the interactions of real and nominal variables. The present paper does exactly this. No nonempirical concepts like utility, equilibrium, rationality, decreasing returns or perfect competition are applied. The analysis runs rigorously in objective structural axiomatic terms. Therefrom follows that it is the factor cost ratio, i.e. the relation of the nominal variables wage rate and price and the real variable productivity that, for any given level of effective demand, drives the fluctuations of employment and output.

This is the work of Egmont Kakarot-Handtke, whose paper mirrors the abstract. It hinges on absurd assumptions which are not justified in any way, and some sort of logic is applied from there. For example, it is stated as a basic premise that profits are not real, only monetary, and this was completely overlooked by all economists. I wonder how economies worked before the introduction of money. The paper continues with "axioms" which are in fact three definitions, whose equations do not share a single variable, and a law of motion for yet another variable. After seeing how prices are determined by accounting identities, I stopped reading. Yet, I somehow felt compelled to write this. It must be the holiday spirit.